EXPLORING THE RELATIONSHIP BETWEEN ENVIRONMENTAL TAXATION AND ENERGY PRODUCTIVITY IN VIETNAM: AN ARDL ANALYSIS

Abstract

This study investigates the impact of environmental taxation on green growth in Vietnam over the period 2010–2022, situated within the broader context of sustainable development and energy transition. Utilizing annual time-series data, the study employs the Autoregressive Distributed Lag (ARDL) model and its associated Error Correction Model (ECM) to examine both short-run dynamics and long-run relationships. Empirical results reveal that economic growth and renewable energy consumption are positively associated with energy productivity, particularly regarding the long-run coefficients. Renewable energy exhibits a relatively stable and positive relationship, highlighting its vital role in improving energy efficiency and supporting the transition toward a low-carbon economy. While environmental taxation is not statistically significant in the short run, it shows a positive long-run association. While the error correction term is negative and statistically significant, the Bounds test provides only limited evidence of cointegration, likely due to the small sample size. The findings suggest that environmental taxes have possible associations in the Vietnam context over the sample period. The study provides policy-relevant insights for improving environmental tax design and promoting sustainable growth strategies in emerging economies.